The Collapse of American Power

In a recent column Paul Craig Roberts points out that

In his famous book, The Collapse of British Power (1972), Correlli Barnett reports that in the opening days of World War II Great Britain only had enough gold and foreign exchange to finance war expenditures for a few months. The British turned to the Americans to finance their ability to wage war. Barnett writes that this dependency signaled the end of British power.

The comparison to modern times is obvious. The United States had no money to finance the Afghanistan and Iraq wars and borrowed the entire amount, mainly from China and Japan. Historians may very well look back at this moment in our history as signaling the end of the American empire.

As I mentioned before, an organization is technically bankrupt when it is deep in debt and there is no foreseeable way it can ever pay off those debts. Paul Craig Roberts goes on to say

Moreover, the GAO report pointed out that the accrued liabilities of the federal government "totaled approximately $53 trillion as of September 30, 2007." No funds have been set aside against this mind boggling liability.

The US "superpower" cannot even finance its own domestic operations, much less its gratuitous wars except via the kindness of foreigners to lend it money that cannot be repaid.

The US will never repay the loans... The dollar is failing in its role as reserve currency and will soon be abandoned. When the dollar ceases to be the reserve currency, the US will no longer be able to pay its bills by borrowing more from foreigners.

By the way if you don't know who Paul Craig Roberts is, you might be tempted to think he is some sort of left wing "doom and gloom" radical who doesn't really know what he is talking about. Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. Scarry, isn't it?